A Beginner’s Guide to Earning Credit Card Rewards
Hi, I’m George and I’m a friend of Thomas’ and I’ve been sharing tips with him on how to collect credit card points over the last year or so. He’s invited me to share my knowledge with his followers on The Bank Engine, so that you too can discover the world of credit card reward points, and how to make the most of them.
What Are Membership Reward Points?
In the UK, reward credit cards are dominated by American Express (or “Amex”). Amex offer different credit cards, that earn different rewards when you use them. Some Amex cards earn you airline miles, some Nectar Points that you can redeem in Sainsburys supermarkets, and some offer cash back.
Many of their cards earn a type of point called Membership Reward points (or “MR points” for short). MR points are really useful because they can be converted to points in one of several different airline and hotel reward schemes. This means that you aren’t tied to using your points for a specific purpose, but can decide later when you’ve built up a balance of points and you’re ready to use them. Since I started collecting points, I’ve focused on Amex credit cards that earn MR points, which I can then redeem on flights.
The basics of Earning Credit Card Rewards
Amex credit cards typically offer ongoing rewards based on how much you spend, plus a generous bonus when you sign up. For example, the Amex Preferred Rewards Gold card earns 1 MR point for each £1 you spend, plus a 2,500 MR point bonus for every £5,000 you spend. New cardmembers can also earn a 20,000 MR points initial bonus when they sign up and spend £3,000 in the first three months.
That means that in your first three months you’d earn 23,000 MR points providing you spend £3,000 on the card. If you spent a further £2,000, taking your total spend to £5,000, you’d trigger a 2,500 MR bonus and have a total of 27,500 MR points. That’s enough points that if converted to the British Airways Avios scheme, you could redeem those points for a return flight to Santorini, or a one-way ticket to New York.
That’s not to say that spending £3,000 in three months is an easy feat. But if you have a big purchase coming up that you can combine with your day-to-day spending, it’s quite possible to meet that target. A bit of planning ahead is usually required to maximise the value earned from credit card rewards.
Where To Start with Credit Card Rewards?
There are many other ways to earn and use your points, both of which I will discuss in future posts. But for now, I’ll try to answer the most common question I see online which is, which Amex credit card is the best one to start with?
Best Amex Beginners Card UK
For me, it’s simple, the American Express Preferred Rewards Gold card is the best place to start. It’s got no card fee for the first year, giving you a chance to try before you commit to paying an annual fee. As well as earning 1 MR point for each £1 you spend, the bonus 2,500 MR points each time you spend £5,000 really helps to build your points balance throughout the year. The card comes with other perks too, such as a £5 credit when you use Deliveroo, usable twice every month. I’ll discuss more about the other perks of this card in a future post.
Right now, you can earn an enhanced signup bonus of not 20,000 but 30,000(!) points when you spend £3,000 points in your first three months of membership. This offer is available if you sign up for the Preferred Rewards Gold card using our referral link below.
https://americanexpress.com/en-gb/referral/gold-credit?ref=gRACECSizi&XL=MIANS
Disclaimer: As with all credit card products, please ensure that you always pay off the balance in full as any interest paid on outstanding balances will outweigh the value of rewards points received. Please note that you may not be accepted for an American Express card dependant on your credit score and it is always worth checking sites like MoneySavingExpert’s credit club to see what your likelihood of being accepted is first.